CERTAIN LIMITED REMEDY DEFAULTS. UNDER SHALLOW CREEK REGULATORY AGREEMENT. Fannie Mae hereby agrees to limit its remedies as set forth below following an Event of Default under this Agreement consisting of an "Event of Default" under the Shallow Creek Regulatory Agreement due solely to the failure or inability of the Owner to deliver the Certificate of Continuing Program Compliance described in the last sentence of the first paragraph of Section 15 of the Shallow Creek Regulatory Agreement (a "LIMITED REMEDY DEFAULT"). Notwithstanding anything in this Agreement or any other to the contrary, Fannie Mae hereby agrees that, following the occurrence of a Limited Remedy Default, Fannie Mae shall not exercise any right or remedy under this Agreement or any other Transaction Document relating to the Related Bonds except the right to replace the existing manager at the Shallow Creek Bond Property with a manager meeting all of the criteria set forth below; provided, however, that the foregoing limitation on Fannie Mae's rights and remedies shall apply only if Fannie Mae receives, within five (5) Business Days of such Limited Remedy Default, a written opinion of Bond Counsel (as defined in the Related Indenture with respect to the Shallow Creek Bond Project) confirming that such Limited Remedy Default will not adversely affect the exclusion of interest on the Related Bonds from gross income for purposes of federal income taxation. The criteria a manager must meet are as follows: (i) it must be experienced in managing apartments in the San Antonio, Texas metropolitan area, (ii) it must be experienced in managing apartments of comparable quality to Shallow Creek Bond Property, (iii) it must be experienced in managing apartments which are subject to requirements of a nature similar to those in the Shallow Creek Regulatory Agreement, and (iv) it must execute and deliver a management agreement substantially similar in form and substance to the existing management agreement governing the management of Shallow Creek Bond Property. The foregoing waiver and agreement by Fannie Mae relates solely to a Limited Remedy Default and nothing contained herein shall limit, impair or be deemed a waiver by Fannie Mae of any of its rights or remedies in connection with any other Event of Default under this Agreement, the Shallow Creek Regulatory Agreement or any other Transaction Document.
